Summary
ServiceNow, Inc. (NOW) filed its 2013 10-K on February 27, 2014, detailing a year of substantial growth and strategic investment. The company reported significant revenue increases, driven primarily by its subscription-based Software-as-a-Service (SaaS) model. Total revenues grew to $424.7 million in 2013, a substantial increase from $243.7 million in 2012, reflecting strong customer acquisition and expansion, with the customer base growing by 36% to 2,061. The company's gross profit percentage for subscription revenues improved to 75%, demonstrating operating leverage. ServiceNow continues to heavily invest in sales and marketing, and research and development to fuel future growth, leading to a net loss of $73.7 million for the year. However, the company's robust revenue growth, expanding customer base, and strong renewal rates (96%) indicate a healthy underlying business. The filing also highlights the company's successful $575 million convertible senior notes issuance in November 2013, providing significant capital for general corporate purposes and strategic opportunities. Investors should note the ongoing investments in international expansion and product development, which are key drivers of the company's future trajectory.
Financial Highlights
54 data points| Revenue | $424.65M |
| Cost of Revenue | $155.26M |
| Gross Profit | $269.39M |
| R&D Expenses | $78.68M |
| Operating Expenses | $335.66M |
| Operating Income | -$66.27M |
| Interest Expense | $3.50M |
| Net Income | -$73.71M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 677.08M |
| Shares Outstanding (Diluted) | 677.08M |
Key Highlights
- 1Significant revenue growth: Total revenues reached $424.7 million in 2013, up 74% from $243.7 million in 2012.
- 2Expanding customer base: ServiceNow grew its customer count by 36% to 2,061 by the end of 2013.
- 3Strong subscription revenue growth: Subscription revenues increased by 71% year-over-year to $349.8 million.
- 4Improved subscription gross margin: Gross profit percentage for subscription services rose to 75% in 2013 from 69% in 2012.
- 5Significant investment in growth: Sales & Marketing and R&D expenses increased by 88% and 100% respectively, signaling a focus on expansion.
- 6Successful debt financing: Issued $575 million in convertible senior notes in November 2013 to fund general corporate purposes.
- 7High renewal rates: Maintained strong customer retention with a renewal rate of 96%.